THE COST OF LIVING COMMISSION

Otago Witness, Issue 3040, 19 June 1912, Page 9

THE COST OF LIVING COMMISSION

SITTING IN CHRISTCHURCH. CHRISTCHURCH, June 11. ' The Cost of Living Commission resumed to-day. / ... Geo. Harper was granted permission to make a statement. He appeared on behalf of T. H. Green and Co. and Benjamin (Ltd.), two firms who were subpoeaned to appear before the commission. Without taking technical objections to the subpoenas he wished to state on behalf of his . clients and other gentlemen that they very respectfully declined to give evidence in the same maimer as was done in Dunedin. They meant no disrespect to the commission, but were following the advice tendered in Dunedin and elsewhere, and were simply acting as a matter of principle. t , The Chairman said the commission regretted that the course indicated was taken, but it had no option in the matter at present except to receive Mr Harper's statement. Gilbert Dixon, butcher, stated that during the past 10 years the retail price of beef had increased by about 10s per-lOOlb —roughly, by Id per lb. Mutton had increased in the same period about the same rate. The retail prices varied at different shops, the prices being higher at shops which delivered meat and booked, involving extra labour and expense. J To Mr Fairbarrn : The increase in the | price of beef was largely due to large I areas that were previously used for cattleraising being now used for dairying, and as a consequence Canterbury butchers had to get supplies from the North Island. ' William Murray, general manager of the Christchurch Meat Company, stated that the retail price of meat had not fluctuated during the last seven years except in regard to beef, but there was little beef exported from the South Island. The local consumption of mutton' left such a large surplus that the stock carried would be of little value if there was no export trade. The cost of stock in the Dominion was entirely regulated by the export prices. The company at one time had nine retail shops in Christchurch, but these had been reduced to three, and were to be further reduced in number.

To the Chairman : The increase in the cost of living was due to the increase in wages, the higher cost of production (irrespective of the increase of wages), and the general tendency to give less work for a given wage. The Chairman : Do you believe that there is such a tendency ?—Witness : Cer. tainly there is such a tendency. Edward Thomas Reece, secretary of E. Reece and Sons (Ltd.), hardware merchants, stated that ordinary everyday lines of hardware such as the general public used had increased in price. Robert Allen, one of the managing directors of Messrs Skelton, Frostick, and Co., boot manufacturers, stated that there had been an increase of wages during 15 years of probably from 25 to 30 per cent. and in the case of girls in the stitching department of 30 to 40 per cent. The incidence of manufacture had altered from hand work to machineiy. This alteration in the incidence of manufacture had quite equalised the advance in wages, and the public was not paying anything for the increase of wages. Nevertheless, there was a high increase in the price of boots, which w-as entirely due to the enormous increase in the cost of material. Fifteen or 18 years ago sole leather cost 9d, but to-day the price was Is 2d or Is 3d—an increase of fully 60 per cent. Other leathers had increased fully 40 per cent. Two-thirds of a boot wa 6 represented by material. The rise in the cost of material was not due to any local cause or to any combination on tlie part of the tanneries, but was entirely due to the tremendous demand for hides and skins over th« whole world. The price of French calf and glace kid had increased fully 4t per cent. Another factor in the increase was that the public were demanding better stuff. Boots and shoes bought 10 or 15 years ago were not looked at now. The public demanded more 6tyle and more quality, and were paying high prices for it. The question of fashion was a very big item. The tariff did not unduly tax the higher grades of boots—anything over 10s per pair—but taxed the lower-priced stuff. This had the effect of educating the people up to a better class of boot. The wage paid to bootmakers in England ana Germany was half that paid in

the Dominion; consequently the New Zea. land manufacturers were producing practically under Freetrade conditions, except in legard to the lower-priced boots. William Minty, clothing manufacturer of the Kaiapoi Woollen Company, stated that since 1902 the wages of women workers in the industry had increased by 374 per cent., and the male operators wages had increased by 10 per cent. The qualifications of the present-day workers were much about the same as they were 10 years ago. During the past five years difficulty had been experienced in getting labour, which was due to the general prosperity. The company employed 500 girls, and it found that it was not every girl who possessed the intelligence to adaT>t herself to the business. The average rate paid to tailoresses to-day by the company was 27s 6d per week. About 60 per cent, of the employees received more than the minimum rate.

H. B. Low, general grocer, stated that he had been in business for four years and a-half. There was not a free and open market in all lines of groceries. He was quite sure that there was a combine in (jhristchnrch having the power to scale particular lines. He gave the following list of prices, those in the first column being the price he paid, whilst those in the second were paid by the smaller trader:

sauoe (small) 3 9 4 9 Condensed milk, No. 1, good, was sold at 15s 8d net cash or 18s 6d with a discount of 2£ per cent. All the prices paid by the small trader were subject to 2£ per cent, discount. Regarding sugar, the witness alleged that the federated merchants clubbed together to prevent freetrade- in this line, and that the large retailers got the full benefit of the highest discount (5 per cent.). He further alleged that the heads of two firms in Christchurch had waited upon him and given him to understand that if he supplied goods to a grocer who was cutting prices his (witness's) supply would be cut off. He undertook to give the names to the commission Srivately. Reductions of the duty on olman's mustard and Neave's food had not been passed on to the consumer, but had been taken by the merchants. James Maher, milkman, stated that there had been no increase in the price of milk during the period covered by the commission's order of reference.

June 12. The Cost of Living Commission held another sitting to-day. Arthur Smith, of J. M. Hey wood and Co., carriers, stated that 20 years ago the cost of wholesale cartage was Is Id per ton dead weight and Is 3d measurement. The prices now were 9d and Is. There was a free and open market, the merchants being able to engage any carrier they liked. The present rates had been the result of competition. Tho wages of drivers 20 years ago were at the rate of 6s per day, but tho same men were now earning 8s per day. An express wagon two years ago cost £35, and now tho same tion of employers. A. C. Nottingham, representative of Jeves sanitary compound, stated that he did not belong to the Merchants' Association, and sold his goods to any one. The Merchants' Association wanted him to tariff certain articles and sell them at a higher price. Tho negotiations were by letter a. 1 by interview. He could produce the letter or a copy of it. Tho request in the letter he simply referred back to the association, and told it to fix the matter u~ itself, but he intended to sell the article at the price he was in the custom of selling it at. The president of the association called on his principals in London and endeavoured to get them to sell only to the association or to appoint the association as the distributor in the Dominion. His principals referred the matter to him, and be decided to go on as he had been going an dto stay outside the association. Mr Fairbairn: If Jeyes fluid had been scaled who would have paid?—The public would have borne the increased cost.

Is it within your knowledge that Mr Harold Beauchamp, until recently dhairmaji of the Bank of New Zealand, chairman of the Merchants' Association of Wellington, and the head of the firm of Bannatyne and Co., culled on your principals in London in order to get exclusive control of their manufacture in the Dominion?—Yea. William Williams, boot machine operator

and vice-president of the New Zealand Federated Boot Trade Workers, stated that 12 years ago, under the log or piece system, the labour cost of a pair of boots was 49, divided up as follows: —2s for benching and 2s for finishing. Under the present system the wages cost would not exoeed Is 6d. This boot would sell for 20s. The last three years were the only ones during the past 35 years that he had' ■had > constant employment. He had no " time'.' for the retail portion of the trade, as most of the increased cost to the public, as far as boots were concerned, was due to the retailers. The Chairman: Please speak of your own knowledge. You are not in the retail trade. • , Witness: No, but I have experience of its methods, and I know that what I say is absolute fact. Continuing, witness said he had seen exhibited in a retailer's window boots which boro a ticket describing them as " Clark's celebrated 22s 6d per paw. On examining them he found them to be of local manufacture, and to have cost 10s 6d. There was no local firm named Clark. The New Zealand worker in eight hours' work produced more than a British worker in 10 hours. The British worker received 36s per week, and the New Zealand worker 46s 6d. To the Chairman: There was one New Zealand factory which produoed good work, but it stamped its boots "Brockley, "Philadelphia," "Britishmade," or "Commonwealth," for no other purpose than the exploitation of the public. The purchasers seeing that the boots were branded and appeared to be high grade American or British boots, were prepared to pay the prices asked, whereas the boots were made in a New Zealand factory. The manufacturers in so stamping their goods were out for business, but it meant that no matter how the New Zealand worker exerted him- • self he got no credit. Instead of the boot manufacturer being the dominant factor in the boot trade the retailers were the dominant factor. Mr J. O'Brien, boot manufacturer, stated that the previous witness's estimate of the cost of labour (which did not include stitching) was not quite accurate. A boot the wholesalo 'price of which was 15s would cost for benching 12 years ago from Is lOd to 2s, and for finishing Is 6d to Is Bd, or an average of 3s 6d instead of 4s. The price nowadays would "be about 3s 3d, benching being the same as finishing, Is to Is 2d. There was no demand for cheap boots. Now Zealand manufacturers could compete with the beet imported article. Referring to the brands put on Now Zealand boots (mentioned by the previous witness), he 9tated that this was a demand created by the public and by the retailers. Charles P. Agar, secretary of the Tai Tapu Dairy Company, stated that his oompany was a 00-operative one. The whole of the proceeds of the sale of butter, plus working expenses, was paid back to the suppliers. Tho Chairman: What becomes of the surplus produced in the summer? —During the first few montlis there was always a risk, as the keeping quality of the butter was unreliable. Once they got on to reliable butter they kept as much as they could in store, but could never hold sufficient for local requirements. Tho price of better was regulated by the price in London, South Africa, and San Francisco. Tho London price for last season averaged Is per lb. That was an exceptionally good year, and the price obtained was ljd higher than usual. Tho price of butter for local consumption was based on tho ratio of the amount of butter in store for the requirements of the market. Last winter butter was sold locully at Is 6d retail, but at that price it did not pay the company, as people could not buy butter at that price, ".nd his company had never recovered tho grou id then lost. The companies kept the local price of butter at such a prico as prevented competition on the part of the North Island factories. Last winter North Island butter was sold in Christchurch at Is sd, but. Id per lb was not the difference in price between fresh and stored butter in winter time. Harry Arthur Campbell, a general labourer, stated tliat he was appointed by the General Labourers' Union to give evidence. His opinion was that the •increased cost of living was clue to land speculation and to the ever-increasing price of land. No man could get a house in Christchurch worth living in for less than 12s 6d per week, and a general labourer could not afford that when he was only earning Is per hour while at work.

The Chairman: What does the general labourer's wage average, allowing for wot days?—About 32s per week. Of this 12s goes for rent, leaving 20s for food, clothing, and other necessaries. There was a large number of general lalxmrers in Christchurch who were living below a fair living. They were not living as human beings ought to live, and were not being provided with sufficient food, clothing, and .shelter. The witness suggested that a remedy for tho riso in the cost of living was to stop land speculation, and the way to do that was for the State to take the difference

between-the price paid for land arid the price at whioh it was subsequently sold, less the cost of There should be. a higher land tax, especially on land held by monopolists. He knew of scores of general labourers (particularly married men) anxious to go into the oountry if they were assured of a fair living and of getting & comfortable house. They objected to going out to live in barns, as some of them had to do in the past. William Goss, timber merchant, stated that during the past twenty years the cost of timber had increased. E. W. Waller, timber mechant, stated that he had been in business for thirty four years. For the last few years tho timber business irr Christchurch had been anything but prosperous. Oompetitipn was keener than in other times. Da-vid Jones, farmer, stated that the price of land bad increased. The rate of interest falling had been one cause. Seventeen years ago a farm was bought at £l7 per acre, money being at 7 per cent., whereas two years ago the same farm was sold at £35 per acre, money being at 5 per cent. The cost of farm labour had gone up a great deal. He did not know a single article that had increased in price as the result of the inoreased cost of land. One factor in the rise in the price of land was that the quality of the stock was greater. The price of land did not affect tho price of wheat, as would be borne out by figures, which re handed in. Whilst a farmer got £7 for 40 bushels of wheat, the product of one acre and a-quarter, the miller, after manufacture, got flour, bran, and pollard valued at £8 19s 3d, and the baker produced bread valued at £l4 ss. These figures showed that, as far as the producer was concerned, he was producing as cheaply as he could. The export of wheat was steadily declining, despite the fact that the "whole of Southland had gone in for grain-growing. The present year's wheat harvest was the most prolific in Canterbury that he remembered; otherwise they would have had to import. They would have to import next year, as the area would be insufficient to meet local requirements. The problem in regard to wheat-growing was the insufficiency of labour. It was sometimes stated that farmers did not pay sufficient wages to induce labourers to go into the country, but during the past 20 years the wages of the farm workers had been increasecf by 50 per oerrt. to 80 per cent. The farmers in Canterbury to-day had been farm labourers. If sufficient labour had been available at the proper time potatoes would not have been over £2 per ton. Bacon was likely to be dearer owing to no boy labour being available, the Government having blocked the farmers from getting more Sedgwick boys. Five hundred boys could be absorbed by the farmers in the Dominion. The farmers at present were building houses for men who were going out into the country, but more should be done in this matter. Recently a Templeton farm of 1000 acres was settled by the Government with ten settlers, and though the production would be greater the export would bo decreased, because there would be moro consumers in the country. If workers' dwellings were provided in the country, workers could save on milk, butter, vegetables, and cheese, which represented 31 per cent, of the cost of his household. Twenty years lago witness's father sold mutton from his cart at 2id per lb for forequarters, 3d for sides, and 3id for legs. To-day, by buying for cash and taking it from the shop, meat could bo bought at the same price. For wether mutton farmers received 2£d per pound, and for ewo mutton barely l|d. The price of mutton delivered to tho shop of a large butcher in Christchurch had been, in 1910: Wether. 2.47 d per lb; ewo, 1.17 d per lb; 1911: Wether, 2.88 d per lb; ewe, 1.61 d per lb. 1912: Wether, S.lOd per lb; owe, 1.194 d p«r lb. With the rise in tho price—its highest point in the three years —a cheap shop was started, and it dealt largely in ewe mutton, in which there was no competition with the freezing works. In 1912 the price was high as the result of a dry season. The year before last twothirds of the trade in Christchurch was in owe mutton purchased at no moro than 2d per lb. In the difference between the wholesale and retail prices a big cut went to labour. If the protection on wheat were removed the price of bread would be much higher inside five years. Boots in his family represented 90 per cent, more than bread, and the cost of boots was pressing hard on growing families In a house built in 1897, 184 per cent, went to labour, and in 1911 labour took 32 per cent. Land could be purchased within 2£ miles of Cathedral square for £ll4 per acre. Tho figures he bad given tho commission showed that the New Zealand producer was producing as cheaply as any producer in tho world, and that the price of land did not enter into the question of the increase in the cost of living. As the dairying business extended probably pig raising would increase. It.'would encourage farmers to provide dwellings if they got some relief from the graduated tax

when they provided such dwellings. In theory, farmers got exemption for im'r provements, but in practice they did noti end at present the more a former improved his farm the higher wu his taxation. As a practical farmer, he did not believe it was possible to arrive at the unimproved value of farm lands, and ooift sequently it would be more equitable to tax on the oamtal value. The unimproved values given by the Government gave a handle to believers in single tax theories, but there was no justification for such values. G. F. Simpson'Stated that he had been a fiourmiller for the past 10 years, and did not belong to the association, and never belonged to it. At the current price of flour he had to get his profits out of the sale of bran and pollard. It cost 5s more to produce a ton of flour than was received for it. - yr G. P. T. Rowe, accountant for Messrs 1 Fairbairn, Wright, and Co., stated that he possessed some information regarding the scaled prices introduced by the Merchants Association. - In September last his principal considered that the law had been broken by the New Zealand Merohants' Association, which had entered into an agreement to control the pt ioe of sugar, and pis principal had addressed the following letter to the Minister of Commerce. The witness ' read tho first sentence of the letter. Mr M'Donald: "I don't think this letter should bo read, seeing that proceedings are pending against the company. The Chairman, (to Mr M'Donald): You think it should be handed to us? Mr M'Donald: Yes; we might see it. -• Witness handed in the letter, and pro* posed to read one on the same subject addressed to the then Attorney-general. & The Chairman: Does it deal with the sugar monopoly?—Witness: Yes; there is some referenoo to it. The Chairman: Well, put it in also. The letter was not read, but was handed in. • ;' Witness stated that the proof of the all* gat.ions made in the letter just handed hV was contained in correspondence from | which ho proceeded to quote. Witness, so*.«.'d that the scaled prices (net) for,'' Column's mustard, in boxes, was 16s> and'; his firm'e price before the 'scale •yraa' iri-.; troduced was 14s sd. The prices for' starch were 47s 6d and 45s 6d per owt. The manufacturers' prices of these articles - had not been altered, but there had been a reduction in the duty on mustard. Robinson's groats (in leas than six dozen lots and more than, one dozen) were scaled at 7s 6d. His firm's price was 7s: Robinson's barley 73 6d and 6s lOd. On October 14, 1911, the proprietors of NeaveV food wrote to his principal*:—"Having received complaints from New Zealand merchants as to underselling of our Neave'e food by the retail trade, we have decided that the selling prioa to the retailers be fixed at 9s Cxi per dozen, less the ordinary term* allowed them and thus ensure the mer* chants a fair profit. Wa have, therefore, agreed that from the commencement of the year we can only supply direct to merchants who aro willing to comply with these terms, and in receiving any orders hereafter wo sholl assume that bha merohants agree t tb> this condition, which we need hardly point out- is to their mutual benefit." An invoice attached showed that 150 dozen Is Noave's food was charorpd at 9-. lew 9.0 nercent., and loss 2£ per cent. Witness stated that before the duty was removed tho wholesale price of Neave'e food was between 9s 7d and 10a. The scale price at present was 9s 6d. which showed that practically the reduction in duty had made no difference in the price to the retailers. vr - ,7 ' ' ■: The general public has not benefited ?—No. To whom nas that duty gone?—To the merchants, who have kept it. -They hava kept that in addition to the profit made before?—Yes; and the profifc mado before was not so great as it is now. Witness then read correspondence regarding " Sapon," Jas. Keilor and Son, the proprietors of Van Houten's cocoa, and the Empiro Trading Company. - ____ Mr Fairbairn: What was tho inference drawn from that? —That it was through the operations of the Wholesale Merchants* Association. Witness stated that the prices of galvanised hollow ware had been recently scaled, with the effect that there was a largo increase in prices. An llin bucket was increased in price about 20 per cent. The old price was 10s, less 10 per cent., and the present one was 15s 9d, loss varying discounts, there being a sliding scale, with a maximum of 33£ per cent, and 5 per cent., end for ordinary traders 20 per cent, and 2A per cent. Mr Fairbairn: Who gets the maximum discount?--The hardware people for quantities of £-50. Continuing, he, stated- that his principal has issued a circular informing the fit ax's clients that the firm was arranging to import galvanised hollow ware at prices much less than those quoted by New Zealand manufacturers. Mr rWrbairn: What is tho general effect ol these advances ? Who gains by them wVm goods are scaled ?—The mer-

chant grains. They are not passed on to the retailer at all. You know a. number of lines scaled that are imported by retailers at exactly the same prioe that is paid wholesale ?—The public are paying two profits—one to the •wholesaler and the other to tho retailer. June 13. The Cost of Living Commission resumed its sittings to-day. Mr _ Harper, . solicitor, stated that T. - Kincaid, _ grocer, declined to give evidence. In replying to the chairman, counsel said he was instructed to give reasons for his client declining to givo evidence. Mr J. A. Flesher appeared and stated that A. D. Ford declined to give evidence, as his principal was being proceeded against under the Commercial Trusts Act. D. G. Sullivan, on behalf of the Canterbury Trades and Labour Council, stated that as the result of " speeding up" in factories a much higher standard of comfort was absolutely necessary as compared ■with tibe standard of 10, 12, or 15 years ago. As a result of competition, the development of machinery, and the adoption of scientific management, the time allowed the worker for certain work had been constantly reduced and the worker xecruired to expend more energy. On this point he spoke as one who until three months ago was working in a factorv, and be knew that, speaking generally, what he stated was correct. The increased cost of living pressed more heavily on the general labourer than on the artisan cla>=s, tho wages of the first-named having remained stationary. He was convinced that if tho conditions of life in the country districts were improved and better accommodation provided there would not be the same objection on the part of town workers to go into the country. If 5000 farm labourers were brought into the Dominion from Europe they would drift into the towns before the end of 12 montlis unless farm labourers were brought under the Arbitration Act or had the conditions of labour regulated in some way. CQiarles Lafferty, boot retailer, stated that the cost of living had considerably increased owing to the importation of ■hoddy boots- These boots looked well, •ut onco they got into tho wet they were iseless. He produced an imported boot Costing 12s 6d and retailed at 15s, which ifter three weeks' wear had practically lome to pieces. He also produced a thild's shoe (imported), and stated that it Was an indent article and was supposed to >e all leather. Instead, it had a composition insole faced with canvas and backed -with cardboard. Such goods ought not to t» allowed to be imported, or if imported they should have branded upon them a description of the material used. Witness

next produced a lady's shoe, half of the heel of which was composed of cardboard. liklward Kennedy, secretary of the Farm Labourers' Union, advocated the State going in for farming in competition against farmers. George Callender, secretary in the Dominion for the .Now Zealand Snipping Company, stated that freights from .bond<J.« luid UXMCabtXi, b"L ii-„ t^-iii^j-what to London. The different companies generally arranged rates amongst themselves. Ho was aware that the Continental classification of goods was much lower on many commodities as compared with the English classification, and that goods could be sent from Hamburg to New Zealand at a lower rate than from England. This was due to the competition of German State-subsidised steamers. Richard Allen, flourmiller, and others also gave evidence.

e. d. s. d. Kippered herrings Seeded raisins 3 11 4 3 4 5 9 0 Cochineal 6 1 7 0 Brilliantshine 7 0 7 3 Quickshine 4 3 4 6 Edmond's baking powder 9 0 9 6 Penny vestas 9 3 9 7 Herrings and tomato